In the ongoing cat-and-mouse game between Yelp Inc. and companies looking for an edge on its powerful consumer ratings site, Yelp has accused an Orange County appliance-repair company of trying to deceive consumers by paying for positive online reviews of its services.

The accusation follows an investigation by Yelp, which responded to an ad on Craigslist apparently placed on behalf of American Appliance Repair of Orange, Yelp spokeswoman Kristen Whisenand said Wednesday.

According to Whisenand, who supplied a screenshot of the ad, Yelp’s undercover investigators began looking into the company six weeks ago. She said investigators posing as would-be review writers were offered a modest amount of money – $10 – in exchange for posting a positive review of American Appliance Repair on Yelp.com. In an email exchange, a representative of the appliance company provided a sample review that could be copied, pasted and modified to make it sound legitimate, Whisenand said.

“They’re caught red-handed,” she said of the company, which is poorly rated on the widely used Yelp website, with an average of two stars out of five, based on 19 reviews.

A man who answered the phone at American Appliance Repair on Wednesday said no owner or manager was available to discuss Yelp’s accusations. The company’s website, VIPapplianceservice.com, lists as an address a post office box in Placentia, though Yelp shows a location in Orange with an identical phone number.

The case illustrates the prickly relationship between Yelp, which bases its business model on displaying reviews that are nearly always written anonymously by consumers, and the myriad small business owners whose fortunes often rise or fall based on how consumers rate them on the website.

Fraud is thought to be rampant among online reviews. A Harvard study last year found that 16 percent of online restaurant reviews in one market, Boston, were fake. Yelp, a dominant review site boasting 132 million unique visitors a month, uses a complex computer algorithm to filter and hide reviews that seem bogus. One-fourth of all reviews submitted to Yelp are filtered out and visible only by taking extra steps in a search.

Business owners often complain that valid positive reviews get filtered out while negative reviews are given prominent display. In many instances, business owners accuse rival shopkeepers of planting negative reviews to sabotage them. San Francisco-based Yelp has defended itself – so far, successfully – against lawsuits by business owners who allege that the company has used the threat of negative reviews to strong-arm them into buying ads on the site.

Yelp instituted a consumer alerts program in October 2012 to raise a red flag when a business’s reviews seem suspicious, Whisenand said. Since then, Yelp has posted warnings on its own website about 350 companies in the U.S. – some because they appear to be paying for reviews, and some because they appear to be writing their own positive reviews, based on the IP addresses where the reviews originated, Whisenand said.

On Tuesday evening, Yelp posted an alert on its review page for American Appliance Repair: “We caught someone red-handed trying to buy reviews for this business. We weren’t fooled, but wanted you to know because buying reviews not only hurts consumers, but also honest businesses who play by the rules.” Viewers were invited to click a link and see the Craigslist ad or bypass the alert to read the company’s reviews.

Yelp has a similar alert posted for L.A. Epic Club Crawls, a Hollywood-based party and event planning company: “We caught someone offering up cash, discounts, gift certificates or other incentives in exchange for reviews about this business.”

Christine Kamish, the owner of the company, expressed surprise at learning of the alert on Wednesday and responded with a written statement that read, in part: “This was not an attempt to elicit baseless 5 star reviews. Rather, this was an attempt to encourage those clients who were fully satisfied with our services and who actually had 5 star experiences to write a review since these clients do not always do so. ... Our small act of appreciation was in no way meant to be a bribe or purchase of good reviews.”

L.A. Epic Club Crawls has a Yelp rating of 4½ stars based on 23 reviews.

Yelp prefers that businesses make no attempt to elicit reviews from happy customers, recommending that companies take a “hands-off” approach to all reviews, Whisenand said.

Yelp also posts an alert about Extreme Supply, a motorcycle dealership in Signal Hill, which averages four stars in 37 reviews. “A number of positive reviews for this business originated from the same IP address,” Yelp’s alert says. “Our ... software has taken this into account in choosing which reviews to display, but we wanted to call this to your attention because someone may be trying to artificially inflate the rating for this business.”

A man who gave his name only as Robert who answered the phone at Extreme Supply said only: “I have nothing to say about this. I’m sorry.”

Whisenand, the Yelp spokeswoman, said companies that violate the review site’s policies by posting fake reviews are often reported to Yelp by a large community of consumers. Yelp removes the warnings after 90 days unless the violations continue, she said.

“We certainly have evidence” when an alert is posted, she said. “We don’t act in haste.”

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